Defending Arte Moreno

Angels owner Arte Moreno has come under a shocking amount of criticism lately after the team failed to sign high-profile free agent Carl Crawford. As Moreno noted in an LA Times interview, he's received e-mails accusing him of being "cheap" and saying he should sell the team to someone willing to spend more money. If you listen to "Petros and Money" on AM 570, then you might hear producer and "baseball analyst" David Vassegh furiously lambaste the Angels owner. Sunday's LA Times also had an article from Bill Shaikin which offered plenty of veiled criticisms and strongly implied that Moreno should raise ticket prices 50% in order to bring in a free agent like Crawford.

All of these criticisms are absolutely nuts.

As some of you might know, I used to work for the Tampa Bay Rays. In my first season, we had the worst record in baseball, and within three years we were in the World Series. Carl Crawford was a big reason for our success. I got the chance to get to know Crawford a little, and he's one of the best guys I've ever met. He's got a great personality and he works as hard as any player in the game. Crawford does valuable things that don't show up in statsheet, as he wreaks havoc on the basepaths and might be the best defensive leftfielder in the game. I believe Crawford will retire with more than 3,000 hits because of both his athleticism and his outstanding work ethic.

But Carl Crawford is not LeBron James. He won't single-handedly take a team deep into the playoffs (really, hardly any baseball player can), and paying him $142 million over 7 years is excessive. Yes, Crawford would make the Angels a better team, but it's not hard to see why Moreno felt it would be a bad business decision.

The fact of the matter is that baseball is a team game. In order to succeed you need significant contributions from 25 players over the course of a 162-game season. Actually, you really need contributions from almost 40 players because of the strong likelihood that some guys will get injured. The most successful teams in recent years have had deep rosters and strong performances from multiple starting pitchers, multiple relievers, and consistent play in the field and up and down the lineup.

Spending $20 million a year on one player is extremely risky and very inefficient. In the NBA, it makes sense to give a player like Kobe Bryant or LeBron James a maximum contract, because they'll be one of five guys on the floor, give you 40 minutes a game, and the team's offense will effectively go through them. You could make the same case for an NFL quarterback. But for a MLB hitter who gets four plate appearances a game and makes a few defensive plays? Personally, I can't think of too many players not named Albert Pujols who have that kind of overwhelming impact on a team for 162 games in a season.

Shaikin notes that "of the 26 contracts in major league history worth at least $100 million, the Angels have accounted for none of them." That's true, but how about an actual study evaluating those $100 million contracts. Does simply making a large a splashy free agent signing guarantee a $100 million performance?

Of those 26 contracts, eight of them took place in the last two years, and it's too soon to evaluate them. That includes Crawford, Jayson Werth, and Cliff Lee, who were just signed, as well as recent deals like Troy Tulowitzki and Joe Mauer.

Of the 18 remaining deals, I would argue that eight of them turned out to be mistakes, eight of them more or less have worked out, and two of them could be argued either way. The regrettable deals include Vernon Wells, Alfonso Soriano, Mike Hampton, and Barry Zito - a mixture of players who have either underperformed or been injured. The good deals include Derek Jeter, Alex Rodriguez (twice, although you'll get debate on this), and Manny Ramirez (won two titles and always produced, despite annoying the Red Sox enough to trade him). I counted Miguel Cabrera and Johan Santana as good deals, even though those contracts are just three years in and the Mets and Tigers have yet to reach the playoffs in that time. And the two debatable deals were Todd Helton (whose performance has declined through the years) and Jason Giambi (who was great at first, but wasn't the same player after the BALCO allegations).

So what does that tell us? It means that $100 million deals work out about 50% of the time. That's an astonishingly poor percentage, and it should be enough to make any MLB owner seriously hesitate before offering a mega deal. The Yankees and Red Sox might be the only teams in baseball that bring in enough revenues to provide enough for margin for error in the event that a $100 million deal becomes a mistake.

But what about the Angels revenues? We have some idea of them, based on financial documents that were leaked to Deadspin. In 2009, the documents show the Angels had $10 million in net income. That season they had a reported $113 million payroll. We don't have information on net income for 2010, but we know the reported payroll jumped to $121 million. It's hard to see where revenues might have gone up though, considering the team's average ticket price went down in 2010. I'm not sure exactly how much they made in sponsorship and television in 2010.

According to Shaikin, the Angels are projected to have a payroll of $133 million in 2011, so it's hard to see how they could take on an additional $20 million a year in the form of Carl Crawford. Moreno told the Times that he'd have to raise ticket prices to do it. Shaikin writes that the Angels average ticket price is so low that it seems like "the market could support a 50% price hike."

Honestly, I think that's crazy talk. First off, Shaikin is citing Team Marketing Report for its data. Last month, I wrote about the flaws of the TMR formula and how it makes little sense to use it in any reasonable analysis. But second, I think the Angels would have to raise ticket prices an unreasonable amount to add $20 million. We're still in a recession, and asking a family of five to go from spending $20 a ticket to $30 a ticket doesn't seem right. It might also lead to a reduction in attendance.

I had a chance to sit in on an interview with Moreno in my role as a project lead for David Carter's recently released book - "Money Games: Profiting from the Convergence of Sports and Entertainment." We spent several hours with him on the day of our interview, and much what was said is printed in the book. I honestly believe that he's one of the two or three best owners in the game. His teams have made the playoffs five times since he bought the club in 2003 and his payrolls have consistently been among the highest in the game. Through it all, the Angels have maintained a steadfast belief that the game should be affordable and family-friendly, and the team averages over 40,000 fans a night as a result. The atmosphere at Angel Stadium has become one of the most enjoyable in baseball, and Moreno has taken the Angels from a club that once received revenue sharing payments to one that now gives them out.

Any fan who complains about Moreno being cheap, simply doesn't know what they're talking about.

So what can improve the Angels? Well, it's worth noting that they have a very good team already. Our what-have-you-done-for-me-lately society seems to have forgotten that the Halos made a huge deal for Dan Haren in the middle of last season. He's an elite pitcher who has Cy Young potential this year. They should also get back a healthy Kendry Morales, who is a top power hitting first baseman entering the prime of his career.

But the Angels do need to improve their scouting and player development, something they acknowledged by hiring a new scouting director this offseason. The Angels used to have a top-5 farm system, but it's fallen outside the top-20 on some lists. A stronger farm system would mean they would need to take fewer financial risks, as the team currently is paying large sums of money to Torii Hunter, Scott Kazmir, Bob Abreu, Joel Pineiro, Ervin Santana, and Fernando Rodney, among others.

But in the shorter term, the Angels can use the money they may have earmarked for Crawford on filling holes at third base, in the bullpen, and they could use another outfielder. Regardless of what happens, we know the Angels won't be cheap, we know their ticket prices will be affordable, and I can assure you that they will field a strong team - all because of the excellent leadership from their owner Arte Moreno.